The World: Why the US lay-off figures aren't all they appear

Redundancies at middle management level are on the increase, but US agencies are hiring in other areas.

It's at least 6,827 and counting. That's the number of US ad agency lay-offs as of the end of last month, according to BNET, the business management website that has set up an Ad Agency Layoff Counter.

From the traditional, the storied and the global such as JWT, BBDO, Young & Rubicam and Lowe Lintas & Partners, to mid-sized shops such as Fallon, Deutsch, Mullen and GSD&M, the drumbeat of news about agency lay-offs keeps coming.

Even digital agencies are not immune, with the likes of Digitas and Razorfish bailing jobs like so many ships bailing water. Meanwhile, WPP has announced a universal hiring freeze. The prospects for the ad agency one year from now seem obvious: leaner, meaner, and a lot less talent.

OK. Now the good news ... Actually, good news these days constitutes an agency not laying off employees. And are any actually hiring? Anyone? Well, it's not all doom and gloom across the pond.

According to Dany Lennon, the head of The Creative Register, which specialises in placing creatives: "I've actually been massively busy this January. Pre-Thanksgiving, agencies did what they do every year before Christmas - they lay off. None of this is abnormal, so let's get it in perspective. What they have done that's different is talk about why. This year people got nervous because it was bigger."

She adds: "Everyone is exaggerating it, to be honest. Normally, we enter the New Year with new budgets in effect. This year, they'll have no budgets until the lay-offs are completed. Once the new budgets go into effect, there will be hiring. I predict that to be March. WPP's freeze is only for February. Hiring freezes will stop at the end of February, you can be sure of that."

Lennon says that the majority of lay-offs are those earning between $85,000 and $200,000 a year - middleweight and early senior level. "Those laid off earning more than $200,000 are in trouble now," she says. "If an agency is spending more than $200,000, it has to be endorsed by the mother ship.

"One area always percolating is digital, but it's more about being a hybrid than being strictly digital. Hybrids are the future and worth investing in. Another growth area is design. In early 2008, design was dead, but I have a lot of briefs for designers now, which is coming from the unification of visual thinking and the need to have someone in the company who's going to unify visually."

Lennon is not the only headhunter seeing a light at the end of the tunnel. Ada Alpert, of Alpert Strategic Planning Agents, says: "There are a number of agencies that continue to hire because they have gaping holes. It's not as bleak as you might think; digital, direct marketing and promotions agencies continue to do well.

"The last recession felt worse. There's a huge sea change going on, which has not so much to do with the recession, but a shift in communications and in how advertising and marketing bring brands to the marketplace. Digital is huge and offers 360-degree opportunities. Right now, engaging the consumer with the brand is more important than ever for planners."

And some agencies have been less affected than others. The creative hothouse Crispin Porter & Bogusky, headquartered in Miami, is still filling vacant positions. Jeff Hicks, the agency's president and chief executive, says: "The biggest thing for us is that there's been movement in client budgets and they've started to come back.

"We had a lot of panic in November and December. Some clients with adspend in excess of $10 million a month decided not to spend anything, and we're like: what? But now they're saying: 'OK, we're going to be down 20 per cent.' So, we've seen less panic and more stabilisation in a positive way. People are planning significantly, and in some cases, budgets are even up."

It also helps to have the right kind of accounts in a recession. Crispin Porter, recently anointed Advertising Age's 2008 Agency of the Year, has brands such as Coke, Burger King, Domino's and Volkswagen, all of which Hicks says are weathering the recession fairly well.

"We've got clients that feel the world is coming to them," he explains. "We're in a lot of value categories, such as Old Navy. A lot of our businesses such as Burger King, Domino's and VW are doing real well relative to the industry."

He says the agency is still going ahead as planned with expansion into Europe and Asia. "As people look forward, they realise the whole world isn't going to evaporate," he says. "There's still going to be significant marketing needs. The thing I worry about - though less now than in November or December - is what the cost of this recession is going to be on innovation in marketing."

Bartle Bogle Hegarty's New York office has similarly managed to avoid lay-offs. "All we're doing is tightening up the ship, making sure we have the best people where we need them, so that we're efficient and effective and being responsible and don't have to struggle," Kevin Roddy, the agency's chief creative, says. "But clients are definitely cutting back, which forces us to be lean and mean."

As for the next crop of advertising hopefuls, what, if any, job prospects can this year's graduates look forward to? Norm Grey, the creative director of the Creative Circus in Atlanta, says: "They will be tough to place this year, but the good ones will get placed easily. When you get into the middle salary ground, around $150,000 to $200,000, if an ad agency has to make cuts, they can get three or four kids for the same price. So, we're not having a big problem. Our placement rate hung around 95 to 97 per cent within the last year, and now it's down to 91 per cent."